Cover
Cover | 3 Months Ended |
Mar. 31, 2023 shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2023 |
Document Transition Report | false |
Entity File Number | 001-40393 |
Entity Registrant Name | SQUARESPACE, INC. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 20-0375811 |
Entity Address, Address Line One | 225 Varick Street |
Entity Address, Address Line Two | 12th Floor |
Entity Address, City or Town | New York |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10014 |
City Area Code | 646 |
Local Phone Number | 580-3456 |
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share |
Trading Symbol | SQSP |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Amendment Flag | false |
Entity Central Index Key | 0001496963 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q1 |
Class A Common Stock | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 87,295,014 |
Class B Common Stock | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 47,844,755 |
Class C Common Stock | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 239,327 | $ 197,037 |
Restricted cash | 38,170 | 35,583 |
Investment in marketable securities | 0 | 31,757 |
Accounts receivable, net | 11,345 | 10,748 |
Due from vendors | 3,383 | 4,442 |
Prepaid expenses and other current assets | 64,240 | 48,326 |
Total current assets | 356,465 | 327,893 |
Property and equipment, net | 51,772 | 51,633 |
Operating lease right-of-use assets | 84,590 | 86,824 |
Goodwill | 210,438 | 210,438 |
Intangible assets, net | 38,985 | 42,808 |
Other assets | 12,151 | 10,921 |
Total assets | 754,401 | 730,517 |
Current liabilities: | ||
Accounts payable | 5,738 | 12,987 |
Accrued liabilities | 89,886 | 64,360 |
Deferred revenue | 300,245 | 269,689 |
Funds payable to customers | 40,424 | 38,845 |
Debt, current portion | 40,758 | 40,758 |
Operating lease liabilities, current portion | 11,821 | 11,514 |
Total current liabilities | 488,872 | 438,153 |
Deferred income taxes, non-current portion | 850 | 788 |
Debt, non-current portion | 463,204 | 473,167 |
Operating lease liabilities, non-current portion | 107,172 | 110,169 |
Other liabilities | 12,638 | 11,231 |
Total liabilities | 1,072,736 | 1,033,508 |
Commitments and contingencies (see Note 10) | ||
Stockholders’ deficit: | ||
Additional paid in capital | 859,417 | 875,737 |
Accumulated other comprehensive loss | (1,191) | (1,665) |
Accumulated deficit | (1,176,574) | (1,177,076) |
Total stockholders’ deficit | (318,335) | (302,991) |
Total liabilities and stockholders’ deficit | 754,401 | 730,517 |
Class A common stock, par value of $0.0001; 1,000,000,000 shares authorized as of March 31, 2023 and December 31, 2022, respectively; 87,295,014 and 87,754,534 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | ||
Stockholders’ deficit: | ||
Common stock | $ 8 | $ 8 |
Common stock, outstanding (in shares) | 87,295,014 | 87,754,534 |
Common stock, issued (in shares) | 87,295,014 | 87,754,534 |
Class B common stock, par value of $0.0001; 100,000,000 shares authorized as of March 31, 2023 and December 31, 2022, respectively; 47,844,755 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | ||
Stockholders’ deficit: | ||
Common stock | $ 5 | $ 5 |
Common stock, outstanding (in shares) | 47,844,755 | 47,844,755 |
Common stock, issued (in shares) | 47,844,755 | 47,844,755 |
Class C common stock (authorized May 10, 2021), par value of $0.0001; 1,000,000,000 shares authorized as of March 31, 2023 and December 31, 2022, respectively; zero shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | ||
Stockholders’ deficit: | ||
Common stock | $ 0 | $ 0 |
Common stock, outstanding (in shares) | 0 | 0 |
Common stock, issued (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 | May 10, 2021 |
Class A Common Stock | |||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock, issued (in shares) | 87,295,014 | 87,754,534 | |
Common stock, outstanding (in shares) | 87,295,014 | 87,754,534 | |
Class B Common Stock | |||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 | |
Common stock, issued (in shares) | 47,844,755 | 47,844,755 | |
Common stock, outstanding (in shares) | 47,844,755 | 47,844,755 | |
Class C Common Stock | |||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 0 | 0 | |
Common stock, outstanding (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 237,028 | $ 207,762 |
Cost of revenue | 42,950 | 36,649 |
Gross profit | 194,078 | 171,113 |
Operating expenses: | ||
Research and product development | 58,570 | 57,328 |
Marketing and sales | 101,672 | 112,906 |
General and administrative | 32,340 | 35,981 |
Total operating expenses | 192,582 | 206,215 |
Operating income/(loss) | 1,496 | (35,102) |
Interest expense | (8,094) | (2,449) |
Other (loss)/income, net | (840) | 1,511 |
Loss before benefit from/(provision for) income taxes | (7,438) | (36,040) |
Benefit from/(provision for) income taxes | 7,940 | (56,820) |
Net income/(loss) | $ 502 | $ (92,860) |
Net income/(loss) per share attributable to Class A, Class B and Class C common stockholders, basic (in dollars per share) | $ 0 | $ (0.67) |
Net income/(loss) per share attributable to Class A, Class B and Class C common stockholders, dilutive (in dollars per share) | $ 0 | $ (0.67) |
Weighted-average shares used in computing net income/(loss) per share attributable to Class A, Class B and Class C stockholders, basic (in shares) | 134,917,610 | 139,423,228 |
Weighted-average shares used in computing net income/(loss) per share attributable to Class A, Class B and Class C stockholders, dilutive (in shares) | 137,182,268 | 139,423,228 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income/(loss) | $ 502 | $ (92,860) |
Other comprehensive income/(loss) | ||
Foreign currency translation adjustment | 258 | (801) |
Unrealized gain/(loss) on marketable securities, net of income taxes | 216 | (178) |
Total other comprehensive income/(loss) | 474 | (979) |
Total comprehensive income/(loss) | $ 976 | $ (93,839) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Class C Common Stock | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Common Stock Class C Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 90,826,625 | 48,344,755 | 0 | |||||||
Beginning balance at Dec. 31, 2021 | $ (13,479) | $ 9 | $ 5 | $ 0 | $ 911,570 | $ (208) | $ (924,855) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation | 24,160 | 24,160 | ||||||||
Stock option exercises (in shares) | 343,687 | 0 | ||||||||
Stock option exercises | 1,141 | 1,141 | ||||||||
Vested RSUs converted to common shares (in shares) | 680,134 | |||||||||
Repurchase of Class A common stock for tax withholdings upon vesting of RSUs (in shares) | (287,455) | |||||||||
Taxes paid related to net share settlement of equity awards | (7,672) | (7,672) | ||||||||
Net income/(loss) | (92,860) | 0 | (92,860) | |||||||
Other comprehensive income | (979) | (979) | ||||||||
Ending balance (in shares) at Mar. 31, 2022 | 91,562,991 | 48,344,755 | 0 | |||||||
Ending balance at Mar. 31, 2022 | (89,689) | $ 9 | $ 5 | $ 0 | 929,199 | (1,187) | (1,017,715) | |||
Beginning balance (in shares) at Dec. 31, 2022 | 87,754,534 | 47,844,755 | 0 | 87,754,534 | 47,844,755 | 0 | ||||
Beginning balance at Dec. 31, 2022 | (302,991) | $ 8 | $ 5 | $ 0 | 875,737 | (1,665) | (1,177,076) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation | 22,595 | 22,595 | ||||||||
Stock option exercises (in shares) | 13,050 | |||||||||
Stock option exercises | 52 | 52 | ||||||||
Vested RSUs converted to common shares (in shares) | 1,357,462 | |||||||||
Repurchase of Class A common stock for tax withholdings upon vesting of RSUs (in shares) | (573,862) | |||||||||
Taxes paid related to net share settlement of equity awards | (13,369) | (13,369) | ||||||||
Repurchase of Class A common stock and retirement (in shares) | (1,256,170) | (1,256,170) | ||||||||
Repurchase and retirement of Class A common stock, consideration | (25,321) | $ (25,321) | (25,321) | |||||||
Excise tax on repurchase of Class A common stock | (277) | (277) | ||||||||
Net income/(loss) | 502 | 502 | ||||||||
Other comprehensive income | 474 | 474 | ||||||||
Ending balance (in shares) at Mar. 31, 2023 | 87,295,014 | 47,844,755 | 0 | 87,295,014 | 47,844,755 | 0 | ||||
Ending balance at Mar. 31, 2023 | $ (318,335) | $ 8 | $ 5 | $ 0 | $ 859,417 | $ (1,191) | $ (1,176,574) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 502 | $ (92,860) |
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 7,241 | 8,058 |
Stock-based compensation | 22,126 | 24,097 |
Deferred income taxes | 62 | 0 |
Non-cash lease (income)/expense | (466) | 328 |
Other | 93 | 261 |
Changes in operating assets and liabilities: | ||
Accounts receivable and due from vendors | 411 | (1,361) |
Prepaid expenses and other current assets | (13,697) | 31,896 |
Accounts payable and accrued liabilities | 16,960 | 42,220 |
Deferred revenue | 29,279 | 21,538 |
Funds payable to customers | 1,580 | 10,847 |
Other operating assets and liabilities | 64 | 2,246 |
Net cash provided by operating activities | 64,155 | 47,270 |
INVESTING ACTIVITIES: | ||
Proceeds from the sale and maturities of marketable securities | 39,664 | 7,340 |
Purchases of marketable securities | (7,824) | (4,027) |
Purchase of property and equipment | (3,075) | (3,359) |
Net cash provided by/(used in) investing activities | 28,765 | (46) |
FINANCING ACTIVITIES: | ||
Principal payments on debt | (10,189) | (3,396) |
Payments for repurchase and retirement of Class A common stock | (25,321) | 0 |
Taxes paid related to net share settlement of equity awards | (12,760) | (7,556) |
Proceeds from exercise of stock options | 92 | 1,141 |
Net cash used in financing activities | (48,178) | (9,811) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 135 | (217) |
Net increase in cash, cash equivalents and restricted cash | 44,877 | 37,196 |
Cash, cash equivalents, and restricted cash at the beginning of the period | 232,620 | 233,680 |
Cash, cash equivalents, and restricted cash at the end of the period | 277,497 | 270,876 |
Reconciliation of cash, cash equivalents, and restricted cash: | ||
Cash and cash equivalents | 239,327 | 230,492 |
Restricted cash | 38,170 | 40,384 |
Cash, cash equivalents, and restricted cash at the end of the period | 277,497 | 270,876 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW | ||
Cash paid during the year for interest | 7,985 | 2,149 |
Cash paid during the year for income taxes | 10,163 | 1 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCE ACTIVITIES | ||
Purchases of property and equipment included in accounts payable and accrued liabilities | 22 | 1,332 |
Capitalized stock-based compensation | 469 | 63 |
Accrued taxes related to net share settlement of equity awards | $ 645 | $ 116 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Squarespace, Inc. and its subsidiaries (the “Company”) is a leading all-in-one platform for businesses and independent creators to build an online presence, grow their brands and manage their businesses across the internet. The Company offers websites, domains, e-commerce, tools for managing a social media presence, marketing tools, scheduling and hospitality services. The Company is headquartered in New York, NY, with additional offices operating in Chicago, IL, Dublin, Ireland, and Aveiro, Portugal. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s condensed consolidated financial statements may not be comparable to financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards based on public company effective dates. The Company will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the Company’s total annual gross revenue is at least $1,235,000, (ii) the last day of the fiscal year following the fifth anniversary of the completion of the Company's direct listing (iii) the date on which the Company issued more than $1,000,000 in non-convertible debt securities during the prior three-year period, or (iv) the date on which the Company becomes a large accelerated filer. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Consolidation The Company’s condensed consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. The condensed balance sheet data as of December 31, 2022 was derived from the Company's audited financial statements but does not include all disclosures required by U.S. GAAP. Therefore, these unaudited, condensed, consolidated financial statements and accompanying notes should be read in conjunction with the Company's annual consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K filed with the SEC on March 9, 2023. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Significant estimates include but are not limited to (i) the recognition and measurement of loss contingencies; (ii) the inputs used in the valuation of acquired intangible assets; (iii) the inputs used in the quantitative assessment over goodwill impairment (iii) the grant date fair value of stock-based awards; (iv) the recognition, measurement and valuation of current and deferred income taxes; (v) existence of applicable indirect tax nexus in different jurisdictions and associated indirect tax liabilities; and (vi) the incremental borrowing rate for operating lease liabilities. The Company evaluates its assumptions and estimates on an ongoing basis and adjusts prospectively, if necessary. Concentration of Risks Related to Credit, Interest Rates and Foreign Currencies The Company is subject to credit risk, interest rate risk on any indebtedness the Company would potentially incur, market risk on investments and foreign currency risk in connection with the Company’s operations internationally. The Company maintains the components of its cash and cash equivalents balance in various accounts, which from time to time exceed the federal depository insurance coverage limit. In addition, substantially all cash and cash equivalents, as well as marketable securities, are held by three financial institutions. The Company has not experienced any concentration losses related to its cash, cash equivalents and marketable securities to date. As of March 31, 2023 and December 31, 2022, no single customer accounted for more than 10% of the Company’s accounts receivable. Additionally, no single customer accounted for more than 10% of the Company’s revenue during the three months ended March 31, 2023 and 2022. The Company is also subject to foreign currency risks that arise from normal business operations. Foreign currency risks include the translation of local currency and intercompany balances established in local customer currencies sold through the Company's international subsidiaries. Cash and Cash Equivalents Cash and cash equivalents are stated at fair value. The Company considers all highly liquid investments purchased with an original maturity date of 90 days or less from the date of original purchase to be cash equivalents. Restricted Cash and Payment Processing Transactions As a result of the Company's acquisition of Tock, Inc. during the year ended December 31, 2021, the Company processes certain payments and holds funds on behalf of its restaurant customers consisting of diner prepayments for restaurant reservations as well as to-go orders. While the Company does not have any contractual obligations to hold such cash as restricted, the diner prepayments and associated sales tax are included in restricted cash in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. In addition, the Company recognizes the liability due to restaurant customers in funds payable to customers and the associated sales tax payable in accrued liabilities in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. Funds are remitted to the restaurant customers based on the stipulated contract terms. In addition to restricted cash held on behalf of restaurant customers, the Company recognizes in-transit receivables from certain third-party vendors which assist in processing and settling payment transactions due to a clearing period before the related cash is received or settled. In-transit receivables are included in due from vendors in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. The following table represents the assets and liabilities related to payment processing transactions: March 31, 2023 December 31, 2022 Restricted cash $ 38,170 $ 35,583 Due from vendors 3,383 4,442 Total payment processing assets 41,553 40,025 Funds payable to customers (40,424) (38,845) Sales tax payable (1,129) (1,180) Total payment processing liabilities (41,553) (40,025) Total payment processing transactions, net $ — $ — Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement, describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three-level hierarchy for fair value measurements is defined as follows: Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; and Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. See “Note 5. Fair Value of Financial Instruments” for further information. Leases The Company adopted ASC Topic 842, Leases ("ASC Topic 842"), as of January 1, 2022. The Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement conveys the right to control the use of an identified asset. The Company classifies, measures and recognizes a lease liability on the lease commencement date based on the present value of lease payments over the remaining lease term. As of March 31, 2023, the Company's leases are classified as operating leases. The Company uses an estimated incremental borrowing rate based on information available at the lease commencement date in determining the present value of future payments as the rate implicit in the lease is not generally known. The incremental borrowing rate is based on the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Operating right-of-use assets related to operating lease liabilities equal the amount of the initial measurement of the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives received. Lease terms that are used in determining operating lease liabilities at lease inception may include options to extend or terminate the leases and when it is reasonably certain that the Company will exercise such options. Operating lease expense is recorded on a straight-line basis over the lease term. The straight-line expense is allocated within the condensed consolidated statements of operations based on departmental employee headcount. Variable lease costs are recognized as incurred and allocated within the condensed consolidated statements of operations based on departmental employee headcount. The Company has applied practical expedients for lease agreements with lease and non-lease components, and in such cases, accounts for the components as a single lease component. The Company has also elected not to recognize operating right-of-use assets and operating lease liabilities for any lease with an original lease term of less than one year. Operating lease right-of-use assets are included in non-current assets on the condensed consolidated balance sheets for the entire lease term. The Company includes the portion of the total lease payments, net of implicit interest, that are due in the next 12 months in current liabilities and the remaining portion in non-current liabilities on the condensed consolidated balance sheets. The difference between straight-line lease expense and the cash paid for leases is included as non-cash lease expense in the adjustments to reconcile net loss to net cash provided by operating activities on the condensed consolidated statements of cash flows. Operating sublease income is recognized on a straight-line basis over the sublease term and is allocated within the condensed consolidated statements of operations based on departmental employee headcount. See “Note 11. Leases” for further information on impairment losses on leases recorded during the year ended December 31, 2022. Net Income/(Loss) Per Share Attributable to Class A, Class B and Class C Common Stockholders Basic net income/(loss) per share is computed by dividing net income/(loss) attributable to Class A, Class B and Class C common stockholders by the weighted-average number of shares of the Company’s Class A, Class B and Class C common stock outstanding. Diluted net income/(loss) per share attributable to Class A, Class B and Class C common stockholders is computed by giving effect to all dilutive securities. Diluted net income/(loss) per share attributable to Class A, Class B and Class C common stockholders is computed by dividing the resulting net income/(loss) attributable to Class A, Class B and Class C common stockholders by the weighted-average number of fully diluted Class A, Class B and Class C common shares outstanding. The Company used the if-converted method as though the conversion, exchange or vesting, respectively, had occurred as of the beginning of the period or the original date of issuance, if later. During periods when there is a net loss attributable to Class A, Class B and Class C common stockholders, potentially dilutive Class A, Class B and Class C common stock equivalents are excluded from the calculation of diluted net loss per share attributable to Class A, Class B and Class C common stockholders as their effect is anti-dilutive. If the effect of a conversion of an instrument is neutral to earnings per share, the Company considers the security to be dilutive. Recently Issued Accounting Pronouncements Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies. See “Note 1. Description of Business” for further information on the Company's status as an emerging growth company. Accounting Pronouncements Recently Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASC 2021-08"). This standard requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. ASU 2021-08 is effective for fiscal years and interim periods in those years beginning after December 15, 2022 for nonpublic entities with early adoption permitted. The Company adopted this standard as of January 1, 2023, however, as the Company has not completed any acquisitions subsequent to the date of adoption, the adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848) : Deferral of the Sunset Date of Topic 848. This standard defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. ASU No. 2022-06 is effective upon issuance of this update for all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The Company adopted this standard as of December 31, 2022 and will continue to assess the impact of this standard in its condensed consolidated financial statements as the Company determines the timing of transitioning prior to December 31, 2024. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company primarily derives revenue from annual and monthly subscriptions. Revenue is also derived from non-subscription services, including fixed percentages or fixed-fees earned on revenue share arrangements with third-parties and on sales made through our customers’ sites. The Company has disaggregated revenue from contracts with customers by product type, subscription type, revenue recognition pattern, and geography as these categories depict the nature, amount, timing and uncertainty of revenue and how cash flows are affected by economic factors. The Company disaggregates revenue by product type as follows: Presence Presence revenue primarily consists of fixed-fee subscriptions to the Company’s plans that offer core platform functionalities, currently branded “Personal” and “Business” plans. Presence revenue also consists of fixed-fee subscriptions related to additional entry points for starting online such as domain managed services and social media stories. Additionally, presence revenue is derived from third-party solutions related to email services and access to third-party content to enhance online presence. For customers in need of a larger scale solution, the Company has an enterprise offering, and revenue is recognized over the life of the contract. Commerce Commerce revenue primarily consists of fixed-fee subscriptions to the Company’s plans that offer all the features of presence plans as well as additional features that support end to end commerce transactions, currently branded “Basic” and “Advanced” plans. Commerce revenue also includes fixed-fee subscriptions to a number of other tools that support running an online business such as marketing, member areas, scheduling and hospitality tools. Non-subscription revenue is derived from fixed-fees earned on revenue share arrangements with commerce partners as well as fixed transaction fees earned on gross merchandise value ("GMV") processed through Business plan sites and certain hospitality offerings. Commerce revenue also includes payment processing fees received for use of the Company’s hospitality services. Revenue by Product Type, Subscription Type and Revenue Recognition Pattern The following tables summarize revenue by product type, subscription type, and revenue recognition pattern for the periods presented: Three Months Ended March 31, 2023 Presence Commerce Total Subscription revenue Transferred over time $ 159,580 $ 54,056 $ 213,636 Transferred at a point in time 4,144 — 4,144 Non-subscription revenue Transferred over time 599 895 1,494 Transferred at a point in time 68 17,686 17,754 Total revenue $ 164,391 $ 72,637 $ 237,028 Three Months Ended March 31, 2022 Presence Commerce Total Subscription revenue Transferred over time $ 139,776 $ 47,055 $ 186,831 Transferred at a point in time 3,658 — 3,658 Non-subscription revenue Transferred over time 398 846 1,244 Transferred at a point in time 113 15,916 16,029 Total revenue $ 143,945 $ 63,817 $ 207,762 Revenue by Geography Revenue by geography is based on the customer’s self-reported country identifier or, if not available, the billing address or IP address, and was as follows: Three Months Ended March 31, 2023 2022 United States $ 169,754 $ 146,819 International 67,274 60,943 Total revenue $ 237,028 $ 207,762 Currently no individual country contributes greater than 10% of total international revenue. Deferred Revenue The deferred revenue balance as of March 31, 2023 and December 31, 2022 represents the Company’s aggregate remaining performance obligations that are expected to be recognized as revenue in subsequent periods. Generally, the Company’s contracts are for one year or less and the value for contracts with terms greater than one year is not material. The change in deferred revenue primarily reflects cash payments received during the period for which the performance obligation was not satisfied prior to the end of the period partially offset by $124,130 and $108,622 of revenues recognized during the three months ended March 31, 2023 and 2022, respectively. Capitalized Contract Costs Assets capitalized related to contract costs consisted of the following: March 31, 2023 December 31, 2022 Capitalized referral fees, current $ 6,947 $ 6,368 Capitalized referral fees, non-current 9,044 8,168 Capitalized app fees, current 973 971 Sales commissions, current 489 479 Sales commissions, non-current 153 159 Total capitalized contract costs $ 17,606 $ 16,145 Amortization of capitalized contract costs was $2,928 and $2,629 for the three months ended March 31, 2023 and 2022, respectively, and was included in marketing and sales in the condensed consolidated statements of operations. There were no impairment charges recognized related to capitalized contract costs for the three months ended March 31, 2023 and 2022. Obligations for Returns, Refunds and Other Similar Obligations The Company did not have any material change in revenue recognition from a previous period due to refunds, change in transaction price or other consideration variables. As of March 31, 2023 and December 31, 2022, obligations for refunds were $438 and $400, respectively, and were included in accrued liabilities in the condensed consolidated balance sheets. |
Investment in Marketable Securi
Investment in Marketable Securities | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Marketable Securities | Investment in Marketable Securities During the three months ended March 31, 2023, the Company sold all of its available-for-sale (“AFS”) marketable securities in the form of corporate bonds and commercial paper, asset backed securities and U.S. treasuries and deposited the proceeds into Money Market funds which are Level 1 on the fair market value hierarchy. Please see "Note 5. Fair Value of Financial Instruments" for further information. The following tables represent the amortized cost, gross unrealized gains and losses and fair market value of the Company’s AFS marketable securities as of December 31, 2022: December 31, 2022 Amortized Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Corporate bonds and commercial paper $ 19,849 $ — $ (74) $ 19,775 Asset backed securities 2,219 1 (12) 2,208 U.S. treasuries 9,905 — (131) 9,774 Total investment in marketable securities $ 31,973 $ 1 $ (217) $ 31,757 The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2022, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows: December 31, 2022 Less than 12 months 12 months or Greater Total Aggregate Fair Value Gross Unrealized Losses Aggregate Fair Value Gross Unrealized Losses Aggregate Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 14,768 $ (25) $ 5,007 $ (49) $ 19,775 $ (74) Asset backed securities $ 2,208 $ (12) $ — $ — $ 2,208 $ (12) U.S. treasuries $ 3,873 $ (29) $ 5,901 $ (102) $ 9,774 $ (131) Total investment in marketable securities $ 20,849 $ (66) $ 10,908 $ (151) $ 31,757 $ (217) The Company recognized unrealized losses of $216 and $178 with respect to its AFS securities during the three months ended March 31, 2023 and 2022, respectively. The unrealized losses were due to changes in market rates and the Company has determined the losses are temporary in nature. These unrealized losses were classified in accumulated other comprehensive loss in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. The Company reviews AFS marketable securities on a recurring basis to evaluate whether or not any securities have experienced an other-than-temporary decline in fair value. Some factors considered in establishing an expected credit loss on AFS marketable securities are the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer, the Company's intent to sell, and whether it is more likely than not the Company will be required to sell the investment before recovery of the investments amortized cost basis. The Company did not have any AFS marketable securities for which an expected credit loss has been recorded as the Company's AFS marketable securities with an amortized cost basis lower than fair value were not considered other-than-temporary declines in fair value. In the instance that the Company has AFS marketable securities at an amortized cost basis lower than fair value, the Company does not intend to sell, nor is it more-likely-than not the Company would be required to sell, the AFS marketable security prior to recovery. The contractual maturities of the investments classified as marketable securities were as follows: December 31, 2022 Due within 1 year $ 28,564 Due in 1 year through 5 years 3,193 Total investment in marketable securities $ 31,757 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments A summary of the Company’s investments in marketable securities (including, if applicable, those marketable securities classified as cash and cash equivalents) were as follows: March 31, 2023 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 115,494 $ — $ — $ 115,494 Total $ 115,494 $ — $ — $ 115,494 December 31, 2022 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 82,584 $ — $ — $ 82,584 Available-for-sale debt securities Corporate bonds and commercial paper — 19,775 — 19,775 Asset backed securities — 2,208 — 2,208 U.S. treasuries 9,774 — — 9,774 Total $ 92,358 $ 21,983 $ — $ 114,341 The Company’s valuation techniques used to measure the fair value of money market funds and certain AFS marketable securities were derived from quoted prices in active markets for identical assets. The valuation techniques used to measure the fair value of the Company’s other debt securities, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. There were no transfers of financial instruments between Level 1, Level 2, and Level 3 during the periods presented. For certain other financial instruments, including accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate the fair value of such instruments due to the relatively short maturity of these balances. The Company records debt obligations at their approximate fair values as they are based upon rates available to the Company for obligations of similar terms and maturities. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: March 31, 2023 December 31, 2022 Prepaid advertising expenses $ 1,097 $ 7,045 Prepaid income taxes 36,422 17,134 Prepaid operational expenses 18,321 14,780 Prepaid referrals, current 6,947 6,368 Other current assets 1,453 2,999 Total prepaid expenses and other current assets $ 64,240 $ 48,326 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: March 31, 2023 December 31, 2022 Accrued marketing expenses $ 31,242 $ 14,620 Accrued indirect taxes 36,958 33,486 Accrued product expenses 10,519 4,524 Accrued payroll expense 4,333 4,985 Other accrued expenses 6,834 6,745 Total accrued liabilities $ 89,886 $ 64,360 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt outstanding as of March 31, 2023 and December 31, 2022 was as follows: March 31, 2023 December 31, 2022 Term Loan $ 506,076 $ 516,266 Less: unamortized original issue discount (1,731) (1,917) Less: unamortized deferred financing costs (383) (424) Less: debt, current (40,758) (40,758) Total debt, non-current $ 463,204 $ 473,167 Credit Facility On December 12, 2019 (the “Closing Date”), the Company entered into a credit agreement (the “2019 Credit Agreement”) with certain lending institutions (the “2019 Credit Facility”) which included Initial Term A Loans for $350,000 (“2019 Term Loan”) and Revolving Credit Loans of up to $25,000 (“2019 Revolving Credit Facility”), which included a Letters of Credit sub-facility available up to a total of $15,000 (“2019 Letter of Credit”). On December 11, 2020 (the “Modification Date”), the Company amended the 2019 Credit Agreement (“2020 Credit Agreement”) to increase the total size of the 2019 Term Loan to $550,000 (collectively, the “2020 Term Loan”) with the same lending institutions as the 2019 Credit Facility (collectively, the “Credit Facility”) and extend the maturity date for the 2020 Term Loan and the 2019 Revolving Credit Facility (as extended, the "Revolving Credit Facility") to December 11, 2025 (collectively, the “Modification”). Borrowings under the Credit Facility are subject to an interest rate equal to LIBOR plus the applicable margin based on our Consolidated Total Debt to Consolidated EBITDA ratio. The applicable margin was 1.50% and 1.50% as of March 31, 2023 and 2022, respectively. The effective interest rate was 6.38% and 2.00% as of March 31, 2023 and 2022, respectively. As of March 31, 2023, $7,255 was outstanding under the Revolving Credit Facility in the form of outstanding letters of credit and $17,745 remained available for borrowing by the Company. The letters of credit issued as of March 31, 2023 were related to certain of the Company's operating lease agreements for offices that require security deposits in the form of an irrevocable letter of credit. During the three months ended September 30, 2022, the letter of credit for the Company's security deposit related to its New York, NY headquarters was reduced by $2,388 due to a scheduled step-down per the lease agreement. The letters of credit issued are subject to a fee equal to the interest rate on the Credit Facility. In addition, the Revolving Credit Facility is subject to an unused commitment fee of 0.20% to 0.25%, depending on the consolidated total debt to consolidated EBITDA ratio as defined by the 2020 Credit Agreement, payable quarterly to the lenders in respect of the unutilized commitments. The 2020 Credit Agreement contains certain customary affirmative covenants and events of default. The negative covenants in the Credit Facility include, among other items, limitations on the ability, subject to negotiated exceptions, to incur additional indebtedness or issue additional preferred stock of the Company, to create or issue certain liens on certain assets, to enter into agreements related to mergers and acquisitions, including the sale of certain assets or disposition of assets, or declare, make or pay dividends and distributions. The 2020 Credit Agreement contains certain negative covenants for an indebtedness to consolidated EBITDA ratio, as defined by the 2020 Credit Agreement, and commencing with December 31, 2020 and all fiscal quarters thereafter through maturity. As a result of the Modification, commencing with the fiscal quarter ended December 31, 2020, the Company is required to maintain an indebtedness to consolidated EBITDA ratio of not more than 4.50, tested as of the last day of each fiscal quarter, with a step-down to 4.25 for the fiscal quarters ending March 31, 2022 and June 30, 2022, a further step-down to 4.00 for the fiscal quarters ending September 30, 2022 and December 31, 2022 and a final step-down to 3.75 for the fiscal quarter ending March 31, 2023 and each fiscal quarter thereafter (the “Financial Covenant”), subject to customary equity cure rights. The Financial Covenant is subject to a 0.50 step-up in the event of a material permitted acquisition, which the Company can elect to implement up to two times during the life of the facility. The Company did not elect to implement this step-up as a result of the acquisition of Tock. If the Company is not in compliance with the covenants under the 2020 Credit Agreement or the Company otherwise experiences an event of default, the lenders would be entitled to take various actions, including acceleration of amounts due under the 2020 Credit Agreement. As of March 31, 2023, the Company was in compliance with all applicable covenants, including the Financial Covenant. Consolidated EBITDA is defined in the Credit Agreement as net income/(loss) adjusted to exclude interest expense, other (loss)/income, net, benefit from/(provision for) income taxes, depreciation and amortization, and stock-based compensation expense. In addition, consolidated EBITDA also allows for other adjustments such as the exclusion of transaction costs, changes in deferred revenue, and other costs that may be considered non-recurring. Scheduled Principal Payments The scheduled principal payments required under the terms of the 2020 Credit Facility are as follows: Year Ending December 31, Amount Remainder of 2023 $ 30,568 2024 40,758 2025 434,750 Total $ 506,076 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim periods, the Company uses the estimated annual effective tax rate method under which the Company determines its provision for income taxes based on the current estimate of its annual effective tax rate except for jurisdictions for which a loss is expected for the year and no benefit can be realized for those losses, and the tax effect of discrete items occurring during the period. The estimated annual effective tax rate is based on forecasted annual results which may fluctuate due to significant changes in the forecasted or actual results and any other transaction that results in differing tax treatment. For the three months ended March 31, 2023 and 2022, the Company recorded an income tax benefit of $7,940 and an income tax expense of $56,820 respectively, which resulted in an effective tax rate of (106.7)% and 157.7%, respectively. The Company’s estimated annual effective income tax rate for the three months ended March 31, 2023 differed from the statutory rate of 21% primarily due to the change in the valuation allowance for deferred tax assets related primarily to the capitalization of research and development expenditures as required by the 2017 Tax Cuts and Jobs Act, nondeductible executive compensation, unrecognized tax benefits, state and local income taxes, global intangible low-taxes income, and nondeductible expenses, partially offset by research and development tax credits, deduction from foreign-derived intangible income, and the effect of foreign operations. The Company’s estimated annual effective income tax rate for the three months ended March 31, 2022 differed from the statutory rate of 21% primarily due to an increase in the valuation allowance for deferred tax assets related primarily to the capitalization of research and development expenditures, nondeductible executive compensation, unrecognized tax benefits, and global intangible low-taxed income, partially offset by research and development tax credits, windfall on stock-based compensation, deduction from foreign-derived intangible income and the effect from foreign operations. As of March 31, 2023, the Company had unrecognized tax benefits of $11,943, all of which has been recorded to other liabilities and of which $1,100 would affect the effective tax rate if recognized. As of March 31, 2022, the Company had unrecognized tax benefits of $11,109, of which $2,777 would affect the effective tax rate if recognized and the remainder of $8,332 would not affect the effective tax rate due to the valuation allowance. The increase was primarily due to tax positions taken during the current and prior periods. The Company is unable to reasonably estimate the timing of long-term payments or the amount by which the liability will increase or decrease. The Company believes that its unrecognized tax benefits will decrease by approximately $1,161 within the next twelve months due to expiring statutes of limitation. The Company’s policy is to classify accrued interest and penalties related to unrecognized tax benefits in the benefit from/(provision for) income taxes in the condensed consolidated statement of operations. Accrued interest and penalties were $249 as of March 31, 2023. There were no accrued interest and penalties as of March 31, 2022. The Company’s corporate federal income tax returns for the years ended December 31, 2012 through December 31, 2022 remain subject to examination by the Internal Revenue Service. The Company’s corporate income tax returns for the years ended December 31, 2017 through December 31, 2022 remain subject to examination by taxing authorities in various U.S. states and Ireland. In addition, in the U.S., any net operating losses or credits that were generated in prior years but utilized in open years may also be subject to examination. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the "Inflation Reduction Act") into law. The Inflation Reduction Act contains certain tax measures, including a corporate alternative minimum tax of 15% on some large corporations and a nondeductible 1% excise tax on the net value of certain share repurchases made after December 31, 2022 by covered corporations. The Company recorded $277 related to the excise tax on share repurchases in additional paid in capital in the condensed consolidated balance sheet as of March 31, 2023. On December 15, 2022, the Ireland Finance Act 2022 was signed into Irish law. With the enactment of the Ireland Finance Act 2022, qualifying Ireland-related research and development tax credits do not depend on the generation of future taxable income. As a result, the Company determined these credits to be a credit to research and development expenses in the form of a government grant as analogized under International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance . During the three months ended March 31, 2023 the Company recognized Ireland-related research and development tax credits of $276 as a reduction to research and product development in the condensed consolidated statement of operations. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Indirect Taxes The Company is subject to indirect taxation in some, but not all, of the various U.S. states and foreign jurisdictions in which it conducts business. Therefore, the Company has an obligation to charge, collect and remit Value Added Tax (“VAT”) or Goods and Services Tax (“GST”) in connection with certain foreign sales transactions and sales and use tax in connection with eligible sales to subscribers in certain U.S. states. On June 21, 2018, the U.S. Supreme Court overturned the physical presence nexus standard and held that states can require remote sellers to collect sales and use tax. In addition, U.S. states and foreign jurisdictions have and continue to enact laws which expand tax collection and remittance obligations that could apply to a platform like the Company's. As a result of these rulings, recently enacted laws, and the scope of the Company’s operations, taxing authorities continue to provide regulations that increase the complexity and risks to comply with such laws and could result in substantial liabilities, prospectively as well as retrospectively. Based on the information available, the Company continues to evaluate and assess the jurisdictions in which indirect tax nexus exists and believes that the indirect tax liabilities are adequate and reasonable. However, due to the complexity and uncertainty around the application of these rules by taxing authorities, results may vary materially from the Company’s expectations. The Company had an indirect tax liability of $36,958 and $33,486 as of March 31, 2023 and December 31, 2022, respectively, which is included in accrued liabilities in the condensed consolidated balance sheets. Certain Risks and Concentrations The Company’s revenues were principally generated from SaaS customers establishing their online presence. The market is highly competitive and rapidly changing. Significant changes in this industry, technological advances or changes in customer buying behavior could adversely affect the Company’s future operating results. Other The Company is subject to litigation and other claims that arise in the ordinary course of business. While the ultimate result of outstanding legal matters cannot presently be determined, the Company does not expect that the ultimate disposition will have a material adverse effect on its results of operations or financial condition. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond the Company’s control. Based on the Company’s current knowledge, the final outcome of any particular legal matter will not have a material adverse effect on the Company’s financial condition. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases for its office space with lease terms through 2034. Certain lease agreements include options to extend and/or terminate the lease. The Company's lease agreements do not contain terms and conditions of material restrictions, covenants, or residual value guarantees. Variable lease costs are comprised primarily of the Company's proportionate share of operating expenses and property taxes. On March 10, 2022, the Company entered into an agreement to sublease a portion of one of its office spaces in Chicago, IL through the existing termination date of May 30, 2023. The Company expects to receive total lease payments of approximately $409 over the term of the sublease. During the three months ended March 31, 2023 and 2022, the Company recorded sublease income of $91 and $95, respectively, related to the Chicago, IL office space sublease. On September 15, 2022, the Company entered into a lease for office space in Aveiro, Portugal. As a result, the Company recorded an operating lease liability and operating lease right-of-use asset of $252 and $255, respectively, in the condensed consolidated balance sheet with the difference being due to prepaid rent as of lease commencement. During the year ended December 31, 2022, the Company reassessed the useful life of its operating lease right-of-use asset related to its leased office space in Los Angeles, CA due to ceasing the use of the office space with no expected future benefit. As a result, the Company recorded an additional $258 of operating lease expense during the year ended December 31, 2022. During the year ended December 31, 2022, the Company remeasured the lease liability and adjusted the right-of-use asset related to its leased office space in Portland, OR due to a reassessment of the lease term. As a result, the associated operating lease liability and operating lease right-of-use asset were reduced by $3,213 in the consolidated balance sheet as of December 31, 2022. Additionally, during the year ended December 31, 2022, the Company determined the carrying value of certain right-of-use assets were not recoverable based on undiscounted future cash flows. The Company used the income approach to determine the fair value of the right-of-use assets, including Level 3 inputs of the fair market value hierarchy, based on discounted projected future cash flows over the remaining lease term using a discount rate similar to the current incremental borrowing rate. As a result, the Company recorded aggregated impairment losses of $2,038 in general and administrative expenses in the consolidated statements of operations during the year ended December 31, 2022. The components of operating lease expense, net recognized in the condensed consolidated statements of operations were as follows: Three Months Ended March 31, 2023 2022 Operating lease costs Operating lease costs $ 3,455 $ 3,853 Variable lease costs 764 346 Short-term lease costs 75 — Operating lease income Sublease income $ 182 $ 95 Total operating lease expense, net $ 4,112 $ 4,104 Supplemental disclosure of cash and non-cash operating activities related to operating leases were as follows: Three Months Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities, net of cash received for lease incentives $ 3,922 $ 3,528 As of March 31, 2023, the weighted-average lease term and discount rate related to operating leases were as follows: March 31, 2023 Weighted-average remaining lease term (in years) 8.02 Weighted-average discount rate use in measuring operating lease liabilities 3.76 % As of March 31, 2023, maturities of operating lease liabilities were as follows: Year Ending December 31, Amount Remainder of 2023 $ 11,934 2024 16,496 2025 16,882 2026 17,606 2027 17,069 Thereafter 58,474 Total operating lease payments 138,461 Less: imputed interest (19,468) Total operating lease liabilities $ 118,993 |
Stockholders_ Deficit
Stockholders’ Deficit | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Deficit | Stockholders’ Deficit Class A Common Stock Each holder of shares of Class A common stock shall be entitled to one vote for each share held. As of March 31, 2023, the number of authorized shares of Class A common stock, par value $0.0001 per share, by the Company is 1,000,000,000. On May 10, 2022, the board of directors authorized a general share repurchase program of the Company’s Class A common stock of up to $200,000, with no fixed expiration (the "Stock Repurchase Plan"). These Class A common stock repurchases may occur in the open market, through privately negotiated transactions, through block purchases, other purchase techniques including the establishment of one or more plans under Rule 10b5-1 of the Securities Exchange Act of 1934 or by any combination of such methods. The timing and actual amount of shares repurchased will depend on a variety of different factors and may be modified, suspended or terminated at any time at the discretion of the board of directors. During the three months ended March 31, 2023, the Company repurchased 1,256,170 shares and paid cash of $25,321, including commissions of $25, under the Stock Repurchase Plan through open market purchases. The weighted-average price per share for the share repurchases was $22.04 during the three months ended March 31, 2023. As of March 31, 2023, approximately $54,486 remained available for stock repurchase pursuant to the Stock Repurchase Plan. Class B Common Stock Each holder of shares of Class B common stock shall be entitled to ten votes for each share held. Each outstanding share of the Company's Class B common stock is convertible into one share of Class A common stock at any time. As of March 31, 2023, the number of authorized shares of Class B common stock, par value $0.0001 per share, by the Company is 100,000,000. Class C Common Stock On May 10, 2021, the Company created Class C common stock pursuant to the Company's amended and restated certificate of incorporation. The Company authorized 1,000,000,000 shares of the new Class C common stock, par value $0.0001 per share. The board of directors has the authority, without stockholder approval except as required by the NYSE, to issue shares of the Company's Class C common stock. The new Class C common stock is not convertible into shares of Class A common stock or shares of Class B common stock and has no voting rights. As of March 31, 2023, the Company has not issued any shares of the new Class C common stock. Dividends The Company shall not declare or pay dividends on Class A common stock, Class B common stock or Class C common stock unless the same dividend or distribution with the same record date and payment dated shall be declared or paid on all shares of Class A, Class B and Class C common stock. During the three months ended March 31, 2023 and 2022, the Company did not declare any dividends. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss activity for the three months ended March 31, 2023 and 2022 was as follows: Foreign Currency Translation Adjustments Net Unrealized (Losses)/Gains on Marketable Securities Total Accumulated Other Comprehensive (Loss)/Income Balance at December 31, 2022 $ (1,449) $ (216) $ (1,665) Other comprehensive income before reclassifications 258 216 474 Other comprehensive income 258 216 474 Balance at March 31, 2023 $ (1,191) $ — $ (1,191) Foreign Currency Translation Adjustments Net Unrealized Losses on Marketable Securities Total Accumulated Other Comprehensive Loss Balance at December 31, 2021 $ (170) $ (38) $ (208) Other comprehensive loss before reclassifications (801) (178) (979) Other comprehensive loss (801) (178) (979) Balance at March 31, 2022 $ (971) $ (216) $ (1,187) Amounts reclassified out of accumulated other comprehensive loss, net of taxes, during the three months ended March 31, 2023 and 2022 were not material. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Stock Options Squarespace, Inc. Amended and Restated 2008 Equity Incentive Plan In January 2008, the Company established and approved the Squarespace, Inc. 2008 Equity Incentive Plan which was ratified in 2010 and was subsequently amended and restated in March 2016 (“the 2008 Plan”). Under the 2008 Plan, which covers certain employees and consultants, the Company granted shares of its Class B common stock in the form of stock options. After November 17, 2017, there were no additional grants from the 2008 Plan. Stock options in common stock exercised were 13,050 and 343,687 during the three months ended March 31, 2023 and 2022, respectively. Cash consideration for stock options exercised was $52 and $1,141 during the three months ended March 31, 2023 and 2022, respectively. Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) Squarespace, Inc. 2017 Equity Incentive Plan On November 17, 2017, the Company’s board of directors approved the Squarespace, Inc. 2017 Equity Incentive Plan (“the 2017 Plan”). Under the 2017 Plan, the Company may grant shares of its Class A common stock in the form of RSUs, PSUs, stock options, stock appreciation rights and other stock awards. RSUs generally vest over four years and are measured based on the fair market value of the underlying Class A common stock on the date of grant, as determined by the Company’s board of directors. During the three months ended March 31, 2023 and 2022, there were 459,197 and 680,134 shares that vested under the 2017 plan of which 192,211 and 287,455 shares were reacquired in order to satisfy employee tax obligations, respectively. After April 15, 2021, no additional grants issued from the 2017 Plan. Squarespace, Inc. 2021 Equity Incentive Plan On March 25, 2021, the Company’s board of directors adopted the Squarespace, Inc. 2021 Equity Incentive Plan (“the 2021 Plan”) which was approved by the stockholders on May 3, 2021 and went into effect on May 9, 2021. Under the 2021 Plan, the Company may grant shares of its Class A common stock in the form of RSUs, PSUs, stock options, stock appreciation rights and other stock awards. During the three months ended March 31, 2023 and 2022, the Company granted 4,936,199 and 4,518,476 shares of Class A common stock in the form of RSUs under the 2021 Plan. RSUs are subject to continuous service and generally vest over four years and are measured based on the closing price of the Company's Class A common stock as reported on the date of grant. During the three months ended March 31, 2023, there were 898,265 shares that vested under the 2021 Plan of which 381,651 shares were reacquired in order to satisfy employee tax obligations. During the three months ended March 31, 2022, there were no RSUs that vested under the 2021 Plan. During the three months ended March 31, 2023, the Company granted 148,231 shares of Class A common stock in the form of PSUs under the 2021 Plan. PSUs will generally vest over 3 years and are subject to continuous service and the achievement of certain uFCF margin and revenue growth targets. The percentage of PSUs that will vest can range from 0% to 200% based on the growth targets that are achieved. PSUs are measured based on the closing price of the Company's Class A common stock as reported on the date of grant. The related stock-based compensation expenses are recorded over the vesting period or requisite service period if the performance conditions are probable of being met and included in the condensed consolidated statements of operations. Casalena Performance Award On April 15, 2021 (“Grant Date”), the board of directors of the Company approved an RSU grant to Anthony Casalena, CEO, of 2,750,000 Class A common shares (“Casalena Performance Award”). The Casalena Performance Award vesting is contingent on both service- and market-based vesting conditions. The Company estimated the fair value of the Casalena Performance Award using a Monte Carlo simulation with a weighted-average grant date fair value of $30.38 per Class A common share. The Company will recognize the fair value of the award as stock-based compensation expense using the accelerated attribution method over the longer of (i) the period of time the market condition for each tranche is expected to be met (i.e., the derived service period) or (ii) the service vesting condition of four years. During the three months ended March 31, 2023 and 2022, the Company recorded compensation expense of $4,816 and $7,646, respectively, related to the Casalena Performance Award in general and administrative expenses in the condensed consolidated statements of operations. Stock-based Compensation The classification of stock-based compensation by line item in the condensed consolidated statements of operations was as follows: Three Months Ended March 31, 2023 2022 Cost of revenue $ 1,052 $ 624 Research and product development 10,687 10,168 Marketing and sales 1,871 1,599 General and administrative 8,516 11,706 Total stock-based compensation $ 22,126 $ 24,097 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company's previous Chief Financial Officer, whose resignation was effective as of July 31, 2022, was appointed as a member of the board of directors of Avalara, Inc. on August 28, 2021. Transactions between Avalara, Inc. and the Company were not material for the three months ended March 31, 2022 through the previous Chief Financial Officer’s departure. Certain former members of Tock's senior management, whose resignation was effective as of December 15, 2022, had an ownership in several of the Company's restaurant customers. For the three months ended March 31, 2022, these restaurant customers contributed revenue of $262. As of March 31, 2022, the Company had a liability of $3,030 due to these restaurant customers, which primarily represents diner prepayments and sales tax, and is included in funds due to customers in the condensed consolidated balance sheets. On September 1, 2014, the Company entered into an agreement with Getty Images to resell certain content to the Company’s customers. The Deputy Chairman of Getty Images is a member of the Company’s board of directors. Amounts recorded in connection with this agreement were not material for the three months ended March 31, 2023 and 2022. |
Net Income_(Loss) per Share Att
Net Income/(Loss) per Share Attributable to Class A, Class B and Class C Common Stockholders | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income/(Loss) per Share Attributable to Class A, Class B and Class C Common Stockholders | Net Income/(Loss) per Share Attributable to Class A, Class B and Class C Common StockholdersThe Company computes net income/(loss) per share of Class A common stock, Class B common stock and Class C common stock under the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the Class A common stock, Class B common stock and Class C common stock are substantially identical, other than voting rights. Accordingly, the Class A common stock, Class B common stock and Class C common stock share in the Company’s net income/(loss). The following table sets forth the computation of basic and diluted net income/(loss) per share attributable to Class A, Class B and Class C common stockholders: Three Months Ended March 31, 2023 2022 Numerator: Net income/(loss) $ 502 $ (92,860) Denominator: Weighted-average shares used in computing net income/(loss) per share attributable to Class A, Class B and Class C stockholders, basic 134,917,610 139,423,228 Effect of dilutive securities 2,264,658 — Weighted-average shares used in computing net income/(loss) per share attributable to Class A, Class B and Class C stockholders, dilutive 137,182,268 139,423,228 Net income/(loss) per share attributable to Class A, Class B and Class C common stockholders, basic $ 0.00 $ (0.67) Net income/(loss) per share attributable to Class A, Class B and Class C common stockholders, dilutive $ 0.00 $ (0.67) The following weighted-average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net income/(loss) per share attributable to Class A, Class B and Class C common stockholders for the periods presented because including them would have been antidilutive: Three Months Ended March 31, 2023 2022 Outstanding stock options — 1,553,669 Restricted stock units 2,134,308 9,026,561 Total 2,134,308 10,580,230 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Company’s condensed consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. The condensed balance sheet data as of December 31, 2022 was derived from the Company's audited financial statements but does not include all disclosures required by U.S. GAAP. Therefore, these unaudited, condensed, consolidated financial statements and accompanying notes should be read in conjunction with the Company's annual consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K filed with the SEC on March 9, 2023. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Significant estimates include but are not limited to (i) the recognition and measurement of loss contingencies; (ii) the inputs used in the valuation of acquired intangible assets; (iii) the inputs used in the quantitative assessment over goodwill impairment (iii) the grant date fair value of stock-based awards; (iv) the recognition, measurement and valuation of current and deferred income taxes; (v) existence of applicable indirect tax nexus in different jurisdictions and associated indirect tax liabilities; and (vi) the incremental borrowing rate for operating lease liabilities. The Company evaluates its assumptions and estimates on an ongoing basis and adjusts prospectively, if necessary. |
Concentration of Risks Related to Credit, Interest Rates and Foreign Currencies | Concentration of Risks Related to Credit, Interest Rates and Foreign Currencies The Company is subject to credit risk, interest rate risk on any indebtedness the Company would potentially incur, market risk on investments and foreign currency risk in connection with the Company’s operations internationally. The Company maintains the components of its cash and cash equivalents balance in various accounts, which from time to time exceed the federal depository insurance coverage limit. In addition, substantially all cash and cash equivalents, as well as marketable securities, are held by three financial institutions. The Company has not experienced any concentration losses related to its cash, cash equivalents and marketable securities to date. As of March 31, 2023 and December 31, 2022, no single customer accounted for more than 10% of the Company’s accounts receivable. Additionally, no single customer accounted for more than 10% of the Company’s revenue during the three months ended March 31, 2023 and 2022. The Company is also subject to foreign currency risks that arise from normal business operations. Foreign currency risks include the translation of local currency and intercompany balances established in local customer currencies sold through the Company's international subsidiaries. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Restricted Cash and Payment Processing Transactions | Restricted Cash and Payment Processing Transactions As a result of the Company's acquisition of Tock, Inc. during the year ended December 31, 2021, the Company processes certain payments and holds funds on behalf of its restaurant customers consisting of diner prepayments for restaurant reservations as well as to-go orders. While the Company does not have any contractual obligations to hold such cash as restricted, the diner prepayments and associated sales tax are included in restricted cash in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement, describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three-level hierarchy for fair value measurements is defined as follows: Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; and |
Leases | Leases The Company adopted ASC Topic 842, Leases ("ASC Topic 842"), as of January 1, 2022. The Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement conveys the right to control the use of an identified asset. The Company classifies, measures and recognizes a lease liability on the lease commencement date based on the present value of lease payments over the remaining lease term. As of March 31, 2023, the Company's leases are classified as operating leases. The Company uses an estimated incremental borrowing rate based on information available at the lease commencement date in determining the present value of future payments as the rate implicit in the lease is not generally known. The incremental borrowing rate is based on the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Operating right-of-use assets related to operating lease liabilities equal the amount of the initial measurement of the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives received. Lease terms that are used in determining operating lease liabilities at lease inception may include options to extend or terminate the leases and when it is reasonably certain that the Company will exercise such options. Operating lease expense is recorded on a straight-line basis over the lease term. The straight-line expense is allocated within the condensed consolidated statements of operations based on departmental employee headcount. Variable lease costs are recognized as incurred and allocated within the condensed consolidated statements of operations based on departmental employee headcount. The Company has applied practical expedients for lease agreements with lease and non-lease components, and in such cases, accounts for the components as a single lease component. The Company has also elected not to recognize operating right-of-use assets and operating lease liabilities for any lease with an original lease term of less than one year. Operating lease right-of-use assets are included in non-current assets on the condensed consolidated balance sheets for the entire lease term. The Company includes the portion of the total lease payments, net of implicit interest, that are due in the next 12 months in current liabilities and the remaining portion in non-current liabilities on the condensed consolidated balance sheets. The difference between straight-line lease expense and the cash paid for leases is included as non-cash lease expense in the adjustments to reconcile net loss to net cash provided by operating activities on the condensed consolidated statements of cash flows. Operating sublease income is recognized on a straight-line basis over the sublease term and is allocated within the condensed consolidated statements of operations based on departmental employee headcount. See “Note 11. Leases” for further information on impairment losses on leases recorded during the year ended December 31, 2022. |
Net Income/(Loss) Per Share Attributable to Class A, Class B and Class C Common Stockholders | Net Income/(Loss) Per Share Attributable to Class A, Class B and Class C Common Stockholders Basic net income/(loss) per share is computed by dividing net income/(loss) attributable to Class A, Class B and Class C common stockholders by the weighted-average number of shares of the Company’s Class A, Class B and Class C common stock outstanding. Diluted net income/(loss) per share attributable to Class A, Class B and Class C common stockholders is computed by giving effect to all dilutive securities. Diluted net income/(loss) per share attributable to Class A, Class B and Class C common stockholders is computed by dividing the resulting net income/(loss) attributable to Class A, Class B and Class C common stockholders by the weighted-average number of fully diluted Class A, Class B and Class C common shares outstanding. The Company used the if-converted method as though the conversion, exchange or vesting, respectively, had occurred as of the beginning of the period or the original date of issuance, if later. During periods when there is a net loss attributable to Class A, Class B and Class C common stockholders, potentially dilutive Class A, Class B and Class C common stock equivalents are excluded from the calculation of diluted net loss per share attributable to Class A, Class B |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies. See “Note 1. Description of Business” for further information on the Company's status as an emerging growth company. Accounting Pronouncements Recently Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASC 2021-08"). This standard requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. ASU 2021-08 is effective for fiscal years and interim periods in those years beginning after December 15, 2022 for nonpublic entities with early adoption permitted. The Company adopted this standard as of January 1, 2023, however, as the Company has not completed any acquisitions subsequent to the date of adoption, the adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848) : Deferral of the Sunset Date of Topic 848. This standard defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. ASU No. 2022-06 is effective upon issuance of this update for all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The Company adopted this standard as of December 31, 2022 and will continue to assess the impact of this standard in its condensed consolidated financial statements as the Company determines the timing of transitioning prior to December 31, 2024. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Assets and Liabilities Related to Payment Processing Transactions | The following table represents the assets and liabilities related to payment processing transactions: March 31, 2023 December 31, 2022 Restricted cash $ 38,170 $ 35,583 Due from vendors 3,383 4,442 Total payment processing assets 41,553 40,025 Funds payable to customers (40,424) (38,845) Sales tax payable (1,129) (1,180) Total payment processing liabilities (41,553) (40,025) Total payment processing transactions, net $ — $ — |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Product Type, Subscription Type and Revenue Recognition Pattern | The following tables summarize revenue by product type, subscription type, and revenue recognition pattern for the periods presented: Three Months Ended March 31, 2023 Presence Commerce Total Subscription revenue Transferred over time $ 159,580 $ 54,056 $ 213,636 Transferred at a point in time 4,144 — 4,144 Non-subscription revenue Transferred over time 599 895 1,494 Transferred at a point in time 68 17,686 17,754 Total revenue $ 164,391 $ 72,637 $ 237,028 Three Months Ended March 31, 2022 Presence Commerce Total Subscription revenue Transferred over time $ 139,776 $ 47,055 $ 186,831 Transferred at a point in time 3,658 — 3,658 Non-subscription revenue Transferred over time 398 846 1,244 Transferred at a point in time 113 15,916 16,029 Total revenue $ 143,945 $ 63,817 $ 207,762 |
Schedule of Revenue by Geography | Revenue by geography is based on the customer’s self-reported country identifier or, if not available, the billing address or IP address, and was as follows: Three Months Ended March 31, 2023 2022 United States $ 169,754 $ 146,819 International 67,274 60,943 Total revenue $ 237,028 $ 207,762 |
Schedule of Capitalized Contract Costs | Assets capitalized related to contract costs consisted of the following: March 31, 2023 December 31, 2022 Capitalized referral fees, current $ 6,947 $ 6,368 Capitalized referral fees, non-current 9,044 8,168 Capitalized app fees, current 973 971 Sales commissions, current 489 479 Sales commissions, non-current 153 159 Total capitalized contract costs $ 17,606 $ 16,145 |
Investment in Marketable Secu_2
Investment in Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Marketable Securities | During the three months ended March 31, 2023, the Company sold all of its available-for-sale (“AFS”) marketable securities in the form of corporate bonds and commercial paper, asset backed securities and U.S. treasuries and deposited the proceeds into Money Market funds which are Level 1 on the fair market value hierarchy. Please see "Note 5. Fair Value of Financial Instruments" for further information. The following tables represent the amortized cost, gross unrealized gains and losses and fair market value of the Company’s AFS marketable securities as of December 31, 2022: December 31, 2022 Amortized Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value Corporate bonds and commercial paper $ 19,849 $ — $ (74) $ 19,775 Asset backed securities 2,219 1 (12) 2,208 U.S. treasuries 9,905 — (131) 9,774 Total investment in marketable securities $ 31,973 $ 1 $ (217) $ 31,757 |
Schedule of Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value | The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2022, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows: December 31, 2022 Less than 12 months 12 months or Greater Total Aggregate Fair Value Gross Unrealized Losses Aggregate Fair Value Gross Unrealized Losses Aggregate Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 14,768 $ (25) $ 5,007 $ (49) $ 19,775 $ (74) Asset backed securities $ 2,208 $ (12) $ — $ — $ 2,208 $ (12) U.S. treasuries $ 3,873 $ (29) $ 5,901 $ (102) $ 9,774 $ (131) Total investment in marketable securities $ 20,849 $ (66) $ 10,908 $ (151) $ 31,757 $ (217) |
Schedule of Contractual Maturities | The contractual maturities of the investments classified as marketable securities were as follows: December 31, 2022 Due within 1 year $ 28,564 Due in 1 year through 5 years 3,193 Total investment in marketable securities $ 31,757 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Investments in Marketable Securities | A summary of the Company’s investments in marketable securities (including, if applicable, those marketable securities classified as cash and cash equivalents) were as follows: March 31, 2023 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 115,494 $ — $ — $ 115,494 Total $ 115,494 $ — $ — $ 115,494 December 31, 2022 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 82,584 $ — $ — $ 82,584 Available-for-sale debt securities Corporate bonds and commercial paper — 19,775 — 19,775 Asset backed securities — 2,208 — 2,208 U.S. treasuries 9,774 — — 9,774 Total $ 92,358 $ 21,983 $ — $ 114,341 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: March 31, 2023 December 31, 2022 Prepaid advertising expenses $ 1,097 $ 7,045 Prepaid income taxes 36,422 17,134 Prepaid operational expenses 18,321 14,780 Prepaid referrals, current 6,947 6,368 Other current assets 1,453 2,999 Total prepaid expenses and other current assets $ 64,240 $ 48,326 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: March 31, 2023 December 31, 2022 Accrued marketing expenses $ 31,242 $ 14,620 Accrued indirect taxes 36,958 33,486 Accrued product expenses 10,519 4,524 Accrued payroll expense 4,333 4,985 Other accrued expenses 6,834 6,745 Total accrued liabilities $ 89,886 $ 64,360 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Outstanding | Debt outstanding as of March 31, 2023 and December 31, 2022 was as follows: March 31, 2023 December 31, 2022 Term Loan $ 506,076 $ 516,266 Less: unamortized original issue discount (1,731) (1,917) Less: unamortized deferred financing costs (383) (424) Less: debt, current (40,758) (40,758) Total debt, non-current $ 463,204 $ 473,167 |
Schedule of Principal Payments | The scheduled principal payments required under the terms of the 2020 Credit Facility are as follows: Year Ending December 31, Amount Remainder of 2023 $ 30,568 2024 40,758 2025 434,750 Total $ 506,076 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Expenses | The components of operating lease expense, net recognized in the condensed consolidated statements of operations were as follows: Three Months Ended March 31, 2023 2022 Operating lease costs Operating lease costs $ 3,455 $ 3,853 Variable lease costs 764 346 Short-term lease costs 75 — Operating lease income Sublease income $ 182 $ 95 Total operating lease expense, net $ 4,112 $ 4,104 Supplemental disclosure of cash and non-cash operating activities related to operating leases were as follows: Three Months Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities, net of cash received for lease incentives $ 3,922 $ 3,528 As of March 31, 2023, the weighted-average lease term and discount rate related to operating leases were as follows: March 31, 2023 Weighted-average remaining lease term (in years) 8.02 Weighted-average discount rate use in measuring operating lease liabilities 3.76 % |
Schedule of Maturities of Operating Lease Liabilities | As of March 31, 2023, maturities of operating lease liabilities were as follows: Year Ending December 31, Amount Remainder of 2023 $ 11,934 2024 16,496 2025 16,882 2026 17,606 2027 17,069 Thereafter 58,474 Total operating lease payments 138,461 Less: imputed interest (19,468) Total operating lease liabilities $ 118,993 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss activity for the three months ended March 31, 2023 and 2022 was as follows: Foreign Currency Translation Adjustments Net Unrealized (Losses)/Gains on Marketable Securities Total Accumulated Other Comprehensive (Loss)/Income Balance at December 31, 2022 $ (1,449) $ (216) $ (1,665) Other comprehensive income before reclassifications 258 216 474 Other comprehensive income 258 216 474 Balance at March 31, 2023 $ (1,191) $ — $ (1,191) Foreign Currency Translation Adjustments Net Unrealized Losses on Marketable Securities Total Accumulated Other Comprehensive Loss Balance at December 31, 2021 $ (170) $ (38) $ (208) Other comprehensive loss before reclassifications (801) (178) (979) Other comprehensive loss (801) (178) (979) Balance at March 31, 2022 $ (971) $ (216) $ (1,187) |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation | The classification of stock-based compensation by line item in the condensed consolidated statements of operations was as follows: Three Months Ended March 31, 2023 2022 Cost of revenue $ 1,052 $ 624 Research and product development 10,687 10,168 Marketing and sales 1,871 1,599 General and administrative 8,516 11,706 Total stock-based compensation $ 22,126 $ 24,097 |
Net Income_(Loss) per Share A_2
Net Income/(Loss) per Share Attributable to Class A, Class B and Class C Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Loss per Share | The following table sets forth the computation of basic and diluted net income/(loss) per share attributable to Class A, Class B and Class C common stockholders: Three Months Ended March 31, 2023 2022 Numerator: Net income/(loss) $ 502 $ (92,860) Denominator: Weighted-average shares used in computing net income/(loss) per share attributable to Class A, Class B and Class C stockholders, basic 134,917,610 139,423,228 Effect of dilutive securities 2,264,658 — Weighted-average shares used in computing net income/(loss) per share attributable to Class A, Class B and Class C stockholders, dilutive 137,182,268 139,423,228 Net income/(loss) per share attributable to Class A, Class B and Class C common stockholders, basic $ 0.00 $ (0.67) Net income/(loss) per share attributable to Class A, Class B and Class C common stockholders, dilutive $ 0.00 $ (0.67) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following weighted-average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net income/(loss) per share attributable to Class A, Class B and Class C common stockholders for the periods presented because including them would have been antidilutive: Three Months Ended March 31, 2023 2022 Outstanding stock options — 1,553,669 Restricted stock units 2,134,308 9,026,561 Total 2,134,308 10,580,230 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 institution | |
Accounting Policies [Abstract] | |
Number of financial institutions that hold the company's cash and cash equivalents and marketable securities | 3 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Assets and Liabilities Related to Payment Processing Transactions (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Restricted cash | $ 38,170 | $ 35,583 |
Due from vendors | 3,383 | 4,442 |
Total payment processing assets | 41,553 | 40,025 |
Funds payable to customers | (40,424) | (38,845) |
Sales tax payable | (1,129) | (1,180) |
Total payment processing liabilities | (41,553) | (40,025) |
Total payment processing transactions, net | $ 0 | $ 0 |
Revenue - Product Type, Subscri
Revenue - Product Type, Subscription Type and Revenue Recognition Pattern (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 237,028 | $ 207,762 |
Presence | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 164,391 | 143,945 |
Commerce | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 72,637 | 63,817 |
Subscription revenue | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 213,636 | 186,831 |
Subscription revenue | Transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,144 | 3,658 |
Subscription revenue | Presence | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 159,580 | 139,776 |
Subscription revenue | Presence | Transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,144 | 3,658 |
Subscription revenue | Commerce | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 54,056 | 47,055 |
Subscription revenue | Commerce | Transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Non-subscription revenue | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,494 | 1,244 |
Non-subscription revenue | Transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 17,754 | 16,029 |
Non-subscription revenue | Presence | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 599 | 398 |
Non-subscription revenue | Presence | Transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 68 | 113 |
Non-subscription revenue | Commerce | Transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 895 | 846 |
Non-subscription revenue | Commerce | Transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 17,686 | $ 15,916 |
Revenue - Revenue by Geography
Revenue - Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 237,028 | $ 207,762 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 169,754 | 146,819 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 67,274 | $ 60,943 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |||
Contract with customer, liability, revenues recognized | $ 124,130,000 | $ 108,622,000 | |
Capitalized contract cost, amortization | 2,928,000 | 2,629,000 | |
Capitalized contract cost, impairment | 0 | $ 0 | |
Refund liability | $ 438,000 | $ 400,000 |
Revenue - Capitalized Contract
Revenue - Capitalized Contract Costs (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, net | $ 17,606 | $ 16,145 |
Prepaid referral fees | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, current | 6,947 | 6,368 |
Capitalized contract cost, non-current | 9,044 | 8,168 |
Capitalized app fees, current | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, current | 973 | 971 |
Sales commissions | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, current | 489 | 479 |
Capitalized contract cost, non-current | $ 153 | $ 159 |
Investment in Marketable Secu_3
Investment in Marketable Securities - AFS Marketable Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | $ 31,973 | ||
Gross Unrealized Gains | 1 | ||
Gross Unrealized Losses | (217) | ||
Aggregate Fair Value | 31,757 | ||
Unrealized gains (losses) on available-for-sale securities | $ 216 | $ (178) | |
Corporate bonds and commercial paper | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 19,849 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | (74) | ||
Aggregate Fair Value | 19,775 | ||
Asset backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 2,219 | ||
Gross Unrealized Gains | 1 | ||
Gross Unrealized Losses | (12) | ||
Aggregate Fair Value | 2,208 | ||
U.S. treasuries | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 9,905 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | (131) | ||
Aggregate Fair Value | $ 9,774 |
Investment in Marketable Secu_4
Investment in Marketable Securities - Gross Unrealized Losses and Fair Values (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items] | |
Less than 12 months, Aggregate Fair Value | $ 20,849 |
Less than 12 months, Gross Unrealized Losses | (66) |
12 months or Greater, Aggregate Fair Value | 10,908 |
12 months or Greater, Gross Unrealized Losses | (151) |
Total, Aggregate Fair Value | 31,757 |
Total, Gross Unrealized Losses | (217) |
Corporate bonds and commercial paper | |
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items] | |
Less than 12 months, Aggregate Fair Value | 14,768 |
Less than 12 months, Gross Unrealized Losses | (25) |
12 months or Greater, Aggregate Fair Value | 5,007 |
12 months or Greater, Gross Unrealized Losses | (49) |
Total, Aggregate Fair Value | 19,775 |
Total, Gross Unrealized Losses | (74) |
Asset backed securities | |
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items] | |
Less than 12 months, Aggregate Fair Value | 2,208 |
Less than 12 months, Gross Unrealized Losses | (12) |
12 months or Greater, Aggregate Fair Value | 0 |
12 months or Greater, Gross Unrealized Losses | 0 |
Total, Aggregate Fair Value | 2,208 |
Total, Gross Unrealized Losses | (12) |
U.S. treasuries | |
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items] | |
Less than 12 months, Aggregate Fair Value | 3,873 |
Less than 12 months, Gross Unrealized Losses | (29) |
12 months or Greater, Aggregate Fair Value | 5,901 |
12 months or Greater, Gross Unrealized Losses | (102) |
Total, Aggregate Fair Value | 9,774 |
Total, Gross Unrealized Losses | $ (131) |
Investment in Marketable Secu_5
Investment in Marketable Securities - Contractual Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Due within 1 year | $ 28,564 |
Due in 1 year through 5 years | 3,193 |
Total investment in marketable securities | $ 31,757 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | $ 31,757 | |
Total | $ 115,494 | 114,341 |
Corporate bonds and commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 19,775 | |
Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 2,208 | |
U.S. treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 9,774 | |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 115,494 | 82,584 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 115,494 | 92,358 |
Level 1 | Corporate bonds and commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | |
Level 1 | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | |
Level 1 | U.S. treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 9,774 | |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 115,494 | 82,584 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 21,983 |
Level 2 | Corporate bonds and commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 19,775 | |
Level 2 | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 2,208 | |
Level 2 | U.S. treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Level 3 | Corporate bonds and commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | |
Level 3 | Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | |
Level 3 | U.S. treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid advertising expenses | $ 1,097 | $ 7,045 |
Prepaid income taxes | 36,422 | 17,134 |
Prepaid operational expenses | 18,321 | 14,780 |
Prepaid referrals, current | 6,947 | 6,368 |
Other current assets | 1,453 | 2,999 |
Total prepaid expenses and other current assets | $ 64,240 | $ 48,326 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued marketing expenses | $ 31,242 | $ 14,620 |
Accrued indirect taxes | 36,958 | 33,486 |
Accrued product expenses | 10,519 | 4,524 |
Accrued payroll expense | 4,333 | 4,985 |
Other accrued expenses | 6,834 | 6,745 |
Total accrued liabilities | $ 89,886 | $ 64,360 |
Debt - Debt Outstanding (Detail
Debt - Debt Outstanding (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Term Loan | $ 506,076 | $ 516,266 |
Less: unamortized original issue discount | (1,731) | (1,917) |
Less: unamortized deferred financing costs | (383) | (424) |
Less: debt, current | (40,758) | (40,758) |
Total debt, non-current | $ 463,204 | $ 473,167 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | |||||||
Mar. 31, 2023 USD ($) time | Dec. 31, 2022 | Sep. 30, 2022 USD ($) | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2020 | Dec. 11, 2020 USD ($) | Dec. 12, 2019 USD ($) | |
Line of Credit Facility [Line Items] | ||||||||
Security deposit | $ 2,388,000 | |||||||
2020 Credit Agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.50% | 1.50% | ||||||
Effective interest rate (as a percent) | 6.38% | 2% | ||||||
Debt instrument, covenant, Indebtedness to Consolidated EBITDA ratio | 3.75 | 4 | 4 | 4.25 | 4.25 | 4.50 | ||
Debt instrument, covenant, indebtedness to consolidated EBITDA ratio, step-up amount | 0.50 | |||||||
Debt instrument, covenant, indebtedness to consolidated EBITDA ratio, step-up, number of step-ups available | time | 2 | |||||||
Term Loan | 2019 Credit Agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 350,000 | |||||||
Term Loan | 2020 Credit Agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 550,000,000 | |||||||
Revolving Credit Facility | 2019 Credit Agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 25,000 | |||||||
Revolving Credit Facility | 2020 Credit Agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Remaining borrowing capacity | $ 17,745,000 | |||||||
Revolving Credit Facility | 2020 Credit Agreement | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Commitment fee percentage (as a percent) | 0.20% | |||||||
Revolving Credit Facility | 2020 Credit Agreement | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Commitment fee percentage (as a percent) | 0.25% | |||||||
Letter of Credit | 2019 Credit Agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 15,000 | |||||||
Letter of Credit | 2020 Credit Agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit outstanding | $ 7,255,000 |
Debt - Scheduled Principal Paym
Debt - Scheduled Principal Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Remainder of 2023 | $ 30,568 | |
2024 | 40,758 | |
2025 | 434,750 | |
Total | $ 506,076 | $ 516,266 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ (7,940,000) | $ 56,820,000 |
Effective income tax rate (as a percent) | (106.70%) | 157.70% |
Unrecognized tax benefits | $ 11,943,000 | $ 11,109,000 |
Unrecognized tax benefits that would affect the effective tax rate | 1,100,000 | 2,777,000 |
Unrecognized tax benefits that would not affect the effective tax rate | 8,332,000 | |
Decrease in unrecognized tax benefits | 1,161,000 | |
Accrued interest and penalties | 249,000 | $ 0 |
Excise tax | 277,000 | |
Research and development tax credits | $ 276,000 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Indirect tax liability | $ 36,958 | $ 33,486 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended | |||
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | May 30, 2023 USD ($) | Sep. 15, 2022 USD ($) | Mar. 10, 2022 sublease | |
Lessee, Lease, Description [Line Items] | ||||||
Number of properties subleased | sublease | 1 | |||||
Sublease income | $ 182 | $ 95 | ||||
Total operating lease liabilities | 118,993 | $ 252 | ||||
Operating lease right-of-use assets | 84,590 | $ 86,824 | $ 255 | |||
Operating lease, right of use asset, decrease from lease term reassessment | 3,213 | |||||
Operating lease, lease liability, decrease from lease term reassessment | 3,213 | |||||
Operating lease, impairment loss | 2,038 | |||||
Illinois | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Sublease income | $ 91 | $ 95 | ||||
Illinois | Forecast | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Sublease income | $ 409 | |||||
California | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Additional operating lease expense recorded | $ 258 |
Leases - Operating Lease Costs
Leases - Operating Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating lease costs | ||
Operating lease costs | $ 3,455 | $ 3,853 |
Variable lease costs | 764 | 346 |
Short-term lease costs | 75 | 0 |
Operating lease income | ||
Sublease income | 182 | 95 |
Total operating lease expense, net | $ 4,112 | $ 4,104 |
Leases - Supplemental Disclosur
Leases - Supplemental Disclosure of Cash and Non-Cash and Other Operating Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities, net of cash received for lease incentives | $ 3,922 | $ 3,528 |
Weighted-average remaining lease term (in years) | 8 years 7 days | |
Weighted-average discount rate use in measuring operating lease liabilities (as a percent) | 3.76% |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 15, 2022 |
Leases [Abstract] | ||
Remainder of 2023 | $ 11,934 | |
2024 | 16,496 | |
2025 | 16,882 | |
2026 | 17,606 | |
2027 | 17,069 | |
Thereafter | 58,474 | |
Total operating lease payments | 138,461 | |
Less: imputed interest | (19,468) | |
Total operating lease liabilities | $ 118,993 | $ 252 |
Stockholders_ Deficit (Details)
Stockholders’ Deficit (Details) | 3 Months Ended | |||
Mar. 31, 2023 USD ($) vote $ / shares shares | Dec. 31, 2022 $ / shares shares | May 10, 2022 USD ($) | May 10, 2021 $ / shares shares | |
Class of Stock [Line Items] | ||||
Repurchase and retirement of Class A common stock, consideration | $ 25,321,000 | |||
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Number of votes for each share of common stock | vote | 1 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, authorized (in shares) | shares | 1,000,000,000 | 1,000,000,000 | ||
Share repurchase program, authorized amount (up to) | $ 200,000,000 | |||
Repurchase of Class A common stock and retirement (in shares) | shares | 1,256,170 | |||
Repurchase and retirement of Class A common stock, consideration | $ 25,321,000 | |||
Repurchase and retirement of stock, commission expense | $ 25,000 | |||
Stock repurchased and retired during period, average price per share ( in dollar per shares) | $ / shares | $ 22.04 | |||
Remaining authorized repurchase amount | $ 54,486,000 | |||
Class B Common Stock | ||||
Class of Stock [Line Items] | ||||
Number of votes for each share of common stock | vote | 10 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, authorized (in shares) | shares | 100,000,000 | 100,000,000 | ||
Common stock, share conversion ratio | 1 | |||
Class C Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, authorized (in shares) | shares | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss)/Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Total Accumulated Other Comprehensive (Loss)/Income | ||
Beginning balance | $ (302,991) | $ (13,479) |
Other comprehensive income before reclassifications | 474 | (979) |
Other comprehensive income | 474 | (979) |
Ending balance | (318,335) | (89,689) |
Accumulated Other Comprehensive Income (Loss) | ||
Total Accumulated Other Comprehensive (Loss)/Income | ||
Beginning balance | (1,665) | (208) |
Ending balance | (1,191) | (1,187) |
Foreign Currency Translation Adjustments | ||
Total Accumulated Other Comprehensive (Loss)/Income | ||
Beginning balance | (1,449) | (170) |
Other comprehensive income before reclassifications | 258 | (801) |
Other comprehensive income | 258 | (801) |
Ending balance | (1,191) | (971) |
Net Unrealized (Losses)/Gains on Marketable Securities | ||
Total Accumulated Other Comprehensive (Loss)/Income | ||
Beginning balance | (216) | (38) |
Other comprehensive income before reclassifications | 216 | (178) |
Other comprehensive income | 216 | (178) |
Ending balance | $ 0 | $ (216) |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 24 Months Ended | 64 Months Ended | ||
Apr. 15, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Proceeds from exercise of stock options | $ 92 | $ 1,141 | |||
Stock-based compensation | 22,126 | 24,097 | |||
Stock compensation capitalized | 469 | 63 | |||
General and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | 8,516 | 11,706 | |||
Property and equipment, net | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation capitalized | $ 469 | $ 63 | |||
2008 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option grants (in shares) | 0 | ||||
Stock option exercises (in shares) | 13,050 | 343,687 | |||
Proceeds from exercise of stock options | $ 52 | $ 1,141 | |||
Restricted stock units | 2017 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 4 years | ||||
Vested RSUs converted to common shares (in shares) | 459,197 | 680,134 | |||
Reacquired shares in order to satisfy employee tax withholding (in shares) | 192,211 | 287,455 | |||
RSUs granted (in shares) | 0 | ||||
Restricted stock units | 2021 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 4 years | ||||
Vested RSUs converted to common shares (in shares) | 898,265 | 0 | |||
Reacquired shares in order to satisfy employee tax withholding (in shares) | 381,651 | ||||
Restricted stock units | 2021 Equity Incentive Plan | Class A Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
RSUs granted (in shares) | 4,936,199 | 4,518,476 | |||
Performance Shares | 2021 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Performance Shares | 2021 Equity Incentive Plan | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percent | 0% | ||||
Performance Shares | 2021 Equity Incentive Plan | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percent | 200% | ||||
Performance Shares | 2021 Equity Incentive Plan | Class A Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
RSUs granted (in shares) | 148,231 | ||||
Chief Executive Officer | Casalena Performance Award | General and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation | $ 4,816 | $ 7,646 | |||
Chief Executive Officer | Restricted stock units | Casalena Performance Award | Class A Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 4 years | ||||
RSUs granted (in shares) | 30.38 | ||||
RSUs granted, weighted average grant date fair value (in dollars per share) | $ 2,750,000 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | $ 22,126 | $ 24,097 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | 1,052 | 624 |
Research and product development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | 10,687 | 10,168 |
Marketing and sales | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | 1,871 | 1,599 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation | $ 8,516 | $ 11,706 |
Related Party Transactions (Det
Related Party Transactions (Details) - Senior Management of Acquired Company $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Related Party Transaction [Line Items] | |
Revenue from related parties | $ 262 |
Funds due to customers, related parties | $ 3,030 |
Net Income_(Loss) per Share A_3
Net Income/(Loss) per Share Attributable to Class A, Class B and Class C Common Stockholders - Computation of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income/(loss) | $ 502 | $ (92,860) |
Denominator: | ||
Weighted-average shares used in computing net income/(loss) per share attributable to Class A, Class B and Class C stockholders, basic (in shares) | 134,917,610 | 139,423,228 |
Effect of dilutive securities (in shares) | 2,264,658 | 0 |
Weighted-average shares used in computing net income/(loss) per share attributable to Class A, Class B and Class C stockholders, dilutive (in shares) | 137,182,268 | 139,423,228 |
Net income/(loss) per share attributable to Class A, Class B and Class C common stockholders, basic (in dollars per share) | $ 0 | $ (0.67) |
Net income/(loss) per share attributable to Class A, Class B and Class C common stockholders, dilutive (in dollars per share) | $ 0 | $ (0.67) |
Net Income_(Loss) per Share A_4
Net Income/(Loss) per Share Attributable to Class A, Class B and Class C Common Stockholders - Schedule of Potentially Dilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,134,308 | 10,580,230 |
Outstanding stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 1,553,669 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,134,308 | 9,026,561 |